When trade goes up, there is more demand for shipping. Of course, if there is an over-supply, the rate can still fall even on more trade. Nevertheless, a simple look at shipping rate charts tell you this is a market that is not anywhere near the old equilibrium. This just reinforces the commodity story that the super-cycle is over and trade is not growing at rates any near what shipbuilders may have expected.
Shipping rates seem to have flat-lined since the pre-Financial Crisis environment. However, the variation at these low rates is significant. Clearly, rates have fallen with oil prices. 100% gains and more than 50% declines over a six month or less period are not unusual for all ship sizes. It is not clear that rates will immediately rise with oil prices since some tankers have been used as expensive floating storage. Shipping rates are sending a signal and it is not trade friendly.
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